Volume 15, Issue 6

The gas production is apprehended to start depleting from 2018. To offset the supply deficit, the government has planned to import LNG, which is also expected to start from the same year. But the energy experts expressed concern whether it would be possible to import. This is because the country’s coastal areas are hardly suitable for developing necessary infrastructure for importing the alternative fuel. We have inadequate draft in the coasts for developing LNG terminal while contingency floating arrangements would be difficult to operate in most days of a year. Concerns were also expressed over the obvious price impact of the regasified LNG as a blended energy with local natural gas as per plan would raise the price at least three times by 2030 than now. Businesses consider it would be very difficult to remain competitive, experts see it challenging if exports and remittances do not grow commensurate with the foreign exchange spending while the policymakers say it would not be a problem as the energy would generate revenue.

We think the government’s failure in setting up of baseload power plants has contributed to create the discomfort of adopting contingency planning. The crisis would further deepen if LNG import becomes exclusively floating terminal based. Failure in setting up of land based terminals would need huge new investment for constructing LNG storage on shore. However, there is no alternative to take the challenge, but an integrated approach must be there to face the challenges without any failure to ensure the energy security of the country. 

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